03 July 2014
The EBA launched a public consultation on standards on colleges of supervisors and on standards on joint decisions on approval of internal models. The technical standards on colleges detail supervisory activities performed by colleges in going concern and emergency situations, while the ITS on joint decisions relate to the approval of internal models and detail the processes to be followed by competent authorities when reaching joint decisions. These standards aim at facilitating the interaction and cooperation between authorities at EU and global level and strengthening supervision of cross-border banking groups across the EU.
The draft Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) on the functioning of the colleges of supervisors, launched today for public consultation, cover the general condition on the functioning of colleges and how colleges' supervisory activities should be planned in both normal and emergency situations.
In particular, they detail the conditions for the establishment and functioning of colleges of supervisors, cooperation arrangements between competent authorities of cross-border banking groups and exchange of information necessary for performing key supervisory tasks in a joint and coordinated manner.
Alongside these, the EBA is also consulting on draft ITS on joint decisions on prudential requirements (internal models), which specify the joint decision processes to be followed when deciding on whether to grant permissions for institutions to use the internal-ratings based approach (IRB) for credit risk, the internal model method for counterparty risk (IMM), the advanced measurement approach for operational risk (AMA) and the internal models for market risk. They also detail the process for the approval of material model changes.
These technical standards will facilitate the interaction and cooperation between competent authorities while performing this task in an efficient and consistent way.
The draft RTS and ITS on colleges of supervisors launched for public consultations today have been developed in accordance with Articles 51 and 116 of the Capital Requirements Directive (CRD) and build on the set of guidelines published in 2010 on the topic by the predecessor of the EBA, the Committee of European Banking Supervisors (CEBS). The draft ITS on joint decisions on prudential requirements follow the mandate in Article 20 of the Capital Requirements Regulation (CRR) and build on the CEBS's guidelines published on the topic.
Colleges of supervisors are a mechanism for planning and performing supervisory tasks in the EU banking sector in a coordinated manner across the EU.